IN BRIEF : Investor Wants to Buy IC Railroad
The Prospect Group Inc., a New York investment group with rail interests, said today it would bid $434 million for Illinois Central Transportation Co.
The announcement put the spotlight on what role another IC shareholder that uses its rail lines, Archer Daniels Midland Co., would play.
Prospect said it did not plan to merge the IC railroad with its MidSouth Corp., a Mississippi railroad bought from IC several years ago, planning instead to operate it as a separate company.
“It’s (IC) a good railroad now and we want to make it even better,” Prospect spokesman Donald Dwight told Reuters.
The bid was good news for IC shareholders. The price of the stock shot up $8 on the New York Stock Exchange to $22.50 on news of the $20-a-share bid.
Prospect already owns 4.7% of Illinois Central, which, after several years of restructuring that included selling less profitable short-distance rail lines, was spun off Jan. 1 from Whitman Corp., now mainly a consumer products company. Whitman, previously called IC Industries, owns Midas International, a muffler company, and Pet Inc., a specialty-foods company.